Opinion: What we gain and lose from expat dependent fees

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There has been confusion in the Saudi employment market as well as among expatriates following the recent imposition of a monthly fee on the dependents of expatriates working in the Kingdom. This is because of the fee has been placed on each member of an expatriate’s family, including wife and children, and because most expatriates cannot pay these fees, especially since they will double over the coming years, reaching the equivalent of half of an expatriate’s salary or perhaps all of it.

The positive effects of imposing the dependents’ fee in summary: 1. A source of income to offset the budget deficit to a certain extent. 2. Saving a portion of the cost of subsidies that benefit expatriates. 3. Replacing departing expatriates with Saudis in the employment market. 4. Rectifying the demographic imbalance as expatriates make up 40 percent of the Saudi population. 5. Reducing cover up (tasattur) business and enhancing security as a result of a reduction in crime. 6. Redirecting support to citizens so as to reduce the demand for public utilities, such as electricity, water, and fuel.

The negative consequences in summary 1. The revenue from dependents fees will not have added value as it is not an attractive investment. 2. The continued slowdown in the economy will negatively affect the private sector. 3. The decline in the purchasing power of low-income people after increasing costs will lead to a fall in their standard of living. 4. The jobs that will be made available for Saudis are limited because the majority of expatriates are employed in the technical, technological and vocational fields. 5. Some citizens will lose their jobs because of the closure of some firms that cannot afford the dependents fee. 6. The majority of our companies and establishments will face a decline in their profits due to the loss of their income earned from the spending of expatriates.

Gulf Insider readers, what do you think? Will the positive effects far outweigh the negative consequences?

Source Credit: Saudi Gazette
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